How to optimize a mesh by merging objects and/or reducing faces
I noticed that your file was made in 2.49. This is a very old version of blender, and I very highly recommend that you update to a new version if possible.



Using some rather aggressive decimate modifiers, I got it down to 75k while still looking fairly reasonable:



There are a few dark spots where there seems to be some weirdly positioned vertices messing with the normals, but these should be pretty easy to fix with a touch of the smooth brush or the simplify brush.

What I did:


Joined the two side curtains into one object.  

To join objects, select them and press &#9096; CtrlJ. The selected objects will be joined to the active object (yellow outline):


Applied the scale by selecting the objects and pressing &#9096; CtrlA> Scale.

It's usually a good idea to apply object transforms as a rule of thumb.
The objects have a scale of .001. The object scale defines an offset which can be confusing and even cause precision problems in some cases.
Merged double vertices on each of the objects to close the small gap in the middle of the main curtain and the side curtains.

To remove doubles, enter edit mode (&#8633; Tab), select the part which should be operated on (selecting everything with A should be fine), and press W> Remove doubles:



I found that a threshold of about .003 worked pretty well in this case.
Added decimate modifiers to each object. 

Note that you can copy modifiers between objects with &#9096; CtrlL> Modifiers.


Here is the resulting .blend. I've applied the modifiers, so it should open in 2.49 just fine.